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Banking is one of the most sensitive business all over the world. Banks play very important role in the economy of a country and Bangladesh is no exemption. Banks are custodian to the assets of the general masses. It influences and facilities many different but integrated economic activities like resources mobilization, poverty elimination, production and distribution of public finance. Bangladesh has a well-developed banking system, which consists of a wide variety of institutions ranging from a central bank to commercial banks and to specialized agencies to cater for special requirements of specific sectors. The country started without any worthwhile banking network in 1971 but witnessed phenomenal growth in the first two decades. By 1990, it had acquired a flourishing banking sector. Dhaka Bank Ltd. is the preferred choice in banking for friendly and personalize services, cutting edge technology, tailored solutions for business needs, global reach in trade and commerce and high yield on investments.
1.2 Objective of The report:
To understand the import export and foreign remittance procedures of Dhaka Bank Ltd. To analyze the overall foreign trade achievement with its budget for the month January, February, Month, April, May and June. To analyze the foreign trade position of Dhaka Bank Ltd. by comparing with the other four banks. To find out Dhaka Bank’s contribution in total import and export of Bangladesh. To find out the problems & prospects of foreign trade business under DBL.
Dhaka Bank Ltd. is one of the leading banks in Bangladesh. The scope of the study is quite wide as this report has covered the banking activities that Foreign Exchange Branch performs. In this report I have mainly focused on foreign trade activities including export, import, remittance and their related terms as well as their analysis and performance of DBL Foreign Exchange Branch. These are consist of my observations and on the job experiences during the internship period in the Foreign Exchange Department of SBC Tower branch.
This report is based on the primary and secondary data. This report also bears the practical knowledge of individual worked during the internship period. So the methodology is the mixing of primary and secondary data with practical knowledge. Most of the necessary information has been collected by face to face interview with the people working in different departments, personal investigation, several documents, and files in which most of the activities of the bank are recorded. Observational method and experience has been employed to complete this report. Here I prepare the report as uunder: • • • • Financial ratio Analysis and the objective of this analysis is to measure the profitability of Dhaka Bank Limited. Analysis the mechanism of Import, Export and Foreign Remittance. Comparative analysis of Import, Export and Foreign remittance of DBL Foreign Exchange Branch according to their budget and achievements. Analyze the contribution in total Import and Export of Bangladesh and also compare the import and export of Dhaka Bank limited with some other banks in Bangladesh, here used the compounded annual growth rate for this analysis.
up to date information is not published. 4|Page . journals.6 Limitations There were certain limitations regarding the study that is summarized below: Sometimes I was assigned to do some jobs without explaining why this work was to be done. Printed forms and documents supplier by Dhaka Bank Ltd. Other manual information.1. Since Foreign Exchange is a vast area. This situation has created a lot of problems to understand why a specific function is being performed. Relevant books. Non availability of some preceding year’s statistiacal data. Booklets. Difficulty in accessing data of its internal operations. 1. Large-scale research was not possible due to time constraints. Major source of information were discussed with the officers of Foreign exchange Department. Website of DBL Business Solution of DBL Foreifn Exchange Branch. Practical work exposure from the different desk of Foreign Exchange Department of the Branch. Face to face conversation with the bank officers Sources of Secondary Data Annual report of Dhaka Bank Ltd. In many cases. after doing the regular office works from 10 AM to 6 PM it is not possible to go through in depth within this short span of time.5 Data Collection method Sources of Primary Data Analyzing documents. The tenure of the Internship program is only three months. Large-scale research was not possible due to constraints and restrictions imposed by the organization.
Organizatio n Profile Chapter I 2 5|Page . The secondary source of information was not enough to complete the report.
power. 338 million.4808 million. Urbanization and lifestyle changes concurrent with the economic development created a demand for banking products and services to support the new initiatives as well as to make channel consumer investments in a profitable manner. international trade. A process is also underway to provide e-business facility to the bank's clientele through Online and Home Banking solutions. The Bank started its commercial operation on July 05. backed by the latest technology and a team of highly motivated officers and staff.1 An Overview of the Organization: Dhaka Bank Limited Bangladesh economy has been experiencing a rapid growth since the '90s. The Bank has plans to open more branches in the current fiscal year to expand the network. In its effort to provide “Excellence in Banking” services. communication. A group of highly acclaimed businessmen of the country grouped together to respond to this need and established Dhaka Bank Limited in the year 1995. the Bank has launched fully automated Phone Banking service.000 million and paid up capital of Tk. inflow of expatriate Bangladeshi workers' remittance. 1934 million as on 31 December 2008. food processing and service enterprises ushered in an era of economic activities. 1994. The Bank offers the full range of banking and investment services for personal and corporate customers. 100 million.2. 1995 with an authorized capital of Tk. Industrial and agricultural development. local and foreign investments in construction. The paid up capital of the Bank stood at Tk. The Bank was incorporated as a public limited company under the Companies Act. The Bank has 53 branches including two Shariah-based branches and an offshore Banking Outlet across the country and a wide network of correspondents all over the world. 6|Page . joined a countrywide-shared ATM network and has introduced a cobranded credit card. including the sponsor's capital of Tk. 1. The Shareholders’ Equity (capital and reserves) of the Bank as on 31 December 2008 stood at Tk.
1995 Under the Companies Act 1994 and listed In Dhaka Stock Exchange Limited and Chittagong Stock Exchange Limited Date of Commencement Registered Office SWIFT Code Web page Managing Director Company Secretary Auditors Capital Structure at Formation Authorized capital Paid up capital : BDT 100 Crore : BDT 10 Crore 7|Page July 05. tailored solutions for business needs. Bangladesh.2 Key Facts about Dhaka Bank Limited The banks that were given license during the mid 90s are called the 2nd Generation private Commercial Banks. Some important facts about Dhaka Bank Limited are given below: Name of the Company Legal Form Dhaka bank Limited A public limited company incorporated in Bangladesh on April 06. Arham Masdul Huq Aknabin . global reach in trade and commerce and high yield on investments. Khandaker Mohammad Fazle Rashid Mr. DHBLBDDH www. cutting edge technology. Dhaka bank Limited (DBL) is one of them that incorporated as a public limited company under the Companies Act in 1994 and is governed by banking Companies Act. 2. 1995 Biman Bhaban (1st Flor) 100 Motijheel C/A Dhaka-1000.com Mr. DBL has proved itself as a true development partner of the Government in developing the national economy by providing efficient banking services to different sectors of the economy. 1995. is the preferred choice in banking for friendly and personalized services. 1991.Dhaka Bank Ltd.dhakabankltd. The Bank started its commercial operation on July o5. Since its incorporation.
Capital Structure as on June.Excellence in Banking.4 Vision of DBL At Dhaka Bank we draw our inspiration from the distant. Our vision is to assure a standard that makes every banking transaction a pleasurable experience. reliability.6 Values Customer Focus Integrity and Honesty Quality Teamwork Respect for the Individual Responsible Citizenship Transparency and Accountability Environmentally Conscious 8|Page . timely delivery.5 Goal of DBL Our people. 2010 Authorized capital Paid up Capital : BDT 600 Crore : BDT 266 Crore 2. Our goal is to achieve a distinction foresight. 2. Our prime objective is to deliver a quality that demonstrates a true reflection of our vision. 2.3 Mission of DBL To be the premier financial institution in the country providing high quality products and services backed by latest technology and a team of highly motivated personnel to deliver Excellence in Banking. global reach in trade and commerce and high yield on your investment. 2. Our endeavor is to offer you supreme service through accuracy. products and processes are aligned to meet the demand of our discerning customers. cutting edge technology. and tailored solution for business needs.
They are cautious about environment & climate change and dutiful to make their homeland a green and clean soil. DBL promote employees well being through attractive compensation package. Promise to use all means open to establish and understand these needs which are both mutually beneficial and respect the values and principles in all aspects. Promise to deal quickly. High Morale 2. Their greatest concerns are customers to provide them continually efficient. 9|Page . courteously and accurately with all correspondence. DBL strive for fulfillment of their responsibility to the government through paying entire range of taxes and duties and abiding the other rules. 2. 2. 1.9 Customer Charter DBL seek to build long-term. innovative and high quality products with excellent delivery system.7 Logo of DBL 2. Primary concern is to understand and satisfy customers’ needs and expectations.8 Strategic Objectives of DBL Dhaka Bank’s objectives are to conduct transparent and high quality business operation based on market mechanism within the legal and social framework spelt in their mission and reflected in their vision. They are committed to their community as a corporate citizen and contributing towards the progress of the nation as their corporate social responsibility. development and career planning. sustainable beneficial relationship with all the customers based on the service-commitments and on their underlying values of mutual respect. Their employees are their backbone. Motto is to generate profit with qualitative business as a sustainable ever growing organization and enhance fair returns to their shareholders. promoting staff morale through training. the pursuit of excellence and integrity in all their dealings.
Moreover. CRAB has assigned “A1” (pronounced as single A One) rating in the Long Term and “ST-2” in the Short Term to Dhaka bank limited. 2. to have withdrawal facility for the clients of Dhaka Bank in those networks.10 Recognition Dhaka Bank Limited was rated by Credit Rating Agency of Bangladesh limited (CRAB) on the basis of audited Financial Statements as on December 31. it signed a deal with OMNIBUS and Dutch-Bangla Bank Ltd.3. It also got Best Bank Award and CSR in 2009.11 Future Plan Dhaka Bank has celebrated its 15-year anniversary on 5th July 2010. A1 level of rating indicates strong capacity for timely payment of financial commitments. which create customer delight over a lifetime of patronage. 5. Though it has a strong brand image among the corporate clients. 4. transparency and accountability and provide high standard of services to the valued customers. Create customer value. internal fund generation and access to alternative sources of funds of outstanding. loyalty and equity. retail division of the bank is not that strong as corporate division. 2009. Furthermore. both parties and is framed in the context of a long term and enduring relationship. Should disagreement arise between customer and bank they undertake to seek a speedy and equitable solution. Dhaka bank plans to have qwn ATM network. The workforce is a brilliant one and the work environment is very congenial. Dhaka Bank present itself as a modern and innovative Bank. To improve this situation. with low likeliness of being adversely affected by foreseeable events. In this 15 years of journey. Banks rated as ST-2 category are characterized with commendable position in terms of liquidity. integrity. One of the problems in retail banking is dearth of ATM boths. 2. which takes account of the rights and obligations. Dhaka Bank won the prestigious “Certificate of Merit” of ICAB National awards2008 and Bangladesh Remittance Awards-2009 for the outstanding performance in the field of remittance collection through banking channel. 10 | P a g e . Dhaka Bank is planning to modernize its IT infrastructure to provide the branch network a happy time when serving the customers. Believe in openness.
2. ALCO. 11 | P a g e . As per Bangladesh Bank’s instruction “BASEL II Implementation Team” has been formed which will be responsible for proper implementation of BASEL II capital adequacy guidelines in the Bank. The committees are MANCOM. Several management committees have been formed to handle the banking operation and identifying and managing risk.12 Management The Managing Director heads the management team of Dhaka Bank Limited. The guidelines have been issued by Bangladesh bank recently but the target date for the implementation was 31st December 2009.
2.13 Organizational Structure of Dhaka Bank Limited Organizational Hierarchy Designations are in ascending orderChairman Board of Directors Executive Committee Managing Director Additional Managing Director Executive Level Management Top Management Deputy Managing Director Senior Executive Vice President Executive Vice President Senior Vice President Vice President Senior Assistant Vice President First Assistant Vice President Mid Level Management Assistant Vice President Senior Principal Officer Principal Officer Junior Level Management Senior Officer Officer Probationary Officer 12 | P a g e .
Personal Banking Division VP. F&AD SVP. HRD Senior Vice President Vice President VP SVP. Financial institution Division VP.Junior Officer Assistant Officer Figure 1: Organizational Hierarchy of Dhaka Bank 2. BOARD OF DIRECTORS Managing Director Deputy Managing Director (Operations) Deputy Managing Director (Business Banking) Deputy Managing Director (Credit Operation& Change management) EVP. Operations SVP. Vice President FAVP Assistant Vice President 13 | P a g e .14 Management Hierarchy of Dhaka Bank Ltd. Audit & Change Management Senior Assistant Vice President First Assistant Vice President Ass.
8 8) 39% T otal Income (9.Figure 2: Management Hierarchy of Dhaka Bank 2.15 Economic value Added (EVA) statement for the year ended 31 December 2009 Economic Value Added (EVA) indicates the true economic profit of the company.73) C apital C h arge s(747. EVA is an estimate of the amount by which earnings exceed or fall short of required minimum return for shareholders at comparable risks.65) 50% C orporate T a x(1176. As a commercial banking company we are deeply concern for delivery of value to all of our Shareholders/Equity providers. BDT in Million E co no m ic V a lue Ad de d-20 09 1%4% 6% Economic Value Added (211.641 .32 ) Figure: 3 14 | P a g e .0 7 ) Expenses (7. Shareholders/Equity providers are always conscious about their return on capital invested.505 .
16 Sources of Fund Sources of Funds 3% 4% 11% 4% 78% Paid up Capital Reserve & Surplus Deposits Borrowing from banks Other Liabilities Figure: 4 2.2.17 Uses of Fund 15 | P a g e .
171 million in 2008 to Tk.U ses of Fund 3% 1% 0% 17% 11% 68% Loans & Advances Investments M onet at Call Prem ises & b Fixed Assets Other Assets Cash & Balance with B ank Figure: 5 2.60% in 2008. was 4. which is derived by net interest income divided by average assets.077 million in 2008 to Tk.56% in 2009 as compared to 4. Average yield on advance was 14.32% during 2009. 16 | P a g e . Income from investments increased by 38% from Tk.1. The decrease of Net interest margin was mainly because of increase of earning assets but lower rate of return from advance which results the lower spread. The Net Interest Margin (NIM).18 Income & Revenue Interest income increased by 4% from Tk. The growth of advance resulted this growth of interest income.664 million in 2008 to Tk.061 million in 2009 due to decrease of import & export business which ultimately cause the decrease of commission & fees income.7.466 million in 2009.7.920 million in 2009 mainly due to the income from five and ten years Government Bonds at higher rate of interest which was maintained of SLR purpose.1. Commission and Exchange earnings decreased by 1% from Tk.
19 Expenses Interest expense increased by 4% from Tk. opening of some new branches. 2. Earning base in Assets of the Bank remains unchanged in 2009. Insurance of banks assets. printing stationery. which was 8% in 2008. Salary & Allowance increased by Tk.68 million as compared to 2008 mainly because of increase of office Rent. depreciation of assets.20 Comparison between operating profit and net profit of DBL 17 | P a g e . contractual agency charges etc. Net interest Income increased by 14% from Tk. direct sales agents remuneration.622 million in 2008 to Tk.5.5. The ratio indicates efficient utilization of resources to earn revenues. repair & maintenance.407 million in 2009.2.214 million in 2008 to Tk. 2.980 million in 2009 mainly due to increase of interest income from both advances and investments.2. legal expenses. This rise in interest expense is mainly attributable to the overall increase in deposit base of the bank.
Dhaka bank’s transactional accounts.21 Functional Structure If the Jobs are not organized considering their interrelationship and are not allocated in a Particular department it would be very difficult to control the system effectively.Dhaka Bank Limited registered an operation profit of Tk. Provision for tax for the year 2009 amounted to Tk. Different departments and divisions of Dhaka Bank Limited (DBL) are as follows: Personal Banking Division: This department basically deals with the management of products and services offered to the in individual consumers.959 million compared to previous year’s Tk.42 in 2008.39. Ope rating profit v s Ne t Profit 4000 3500 3000 2500 2000 1500 1000 500 0 Year Operating Profit Net Profit 463 909 580 1184 959 839 704 2010 2533 2810 Taka in Million Figure: 6 2.533 million in 2008 making a growth of 11%.2. 18 | P a g e .810 million in 2009 compared to Tk.1.2.135 million. profit before tax stood at Tk.09 in 2009 compared to Tk. The net profit of the Banks as of 31 December 2009 stood at Tk. savings schemes and loan facilities provide a rare blend of convenience and unparalleled service quality. Dhaka Bank Limited (DBL) has does this work very well. After all provisions including general provisions on unclassified loans. Personal Banking program offers a comprehensive range of products and services matching the need of every discerning customer.839 million making growth of 14%. Earning per share (EPS) was Tk.2.176 million.45.
discounting of Bills of Exchange. arranging Forward Exchange Cover. along with conventional financial products in financial sectors. If this department finds the loan proposal attractive. negotiation and purchase of Export Bills. bond. Foreign Trade Division: International Trade is an important constituent of the Business Portfolio of the Bank. Credit Risk Management: The primary objective of this division is to evaluate the credit worthiness and debt payment capability of present loan customers and loan applicants. enabling the bank to deliver the benefits of truly real-time. foreign currency syndication etc. advising and confirmation of Documentary Credit. Operations Division: The main function of this division is to monitor the overall performance of the bank for daily and regular basis. The unit wants to expand its business horizon through dealing with the new structured finance products like asset-based securitization. issuing. Finance & Accounts Division: Financial Statements are the means of reporting economic activities of an enterprise to the stakeholders. It monitors the other divisions and units also and makes important decisions. on-line banking services to customers through all its 51 branches and 6 SME service centers. Dhaka Bank Limited (DBL) offers a full array Trade Finance Services. it either approves it or sends it for board approval. the role of separate Syndication and Structured Finance Unit is undoubtedly a major necessary. The economic activities are logically presented in the financial statements so that the user can easily understand the 19 | P a g e . pre-shipment and post shipment Finance. Computer and Information Technology Division: The information technology (IT) division of Dhaka bank is run by a highly-motivated talent pool. namely. etc. collection of Bills. Syndication and Structured Finance Unit: In the current corporate finance environment. The respective branches send all loans and advances proposals from the prospective borrowers to the Head office Credit Risk Management for an approval.
technology based products and services to further strengthen our position in the retail banking sector. Emphasis on customer service. The bank uses simulationmodeling tools to periodically measure and monitor interest rate sensitively. dedication. Retail Banking & Cards: In 2009. Audit & Compliance: The main function of this division is to provide legal assistance to the branches and to ensure strict adherence of rules and policies by all concerned officials of the bank through routine and surprise inspection and audit. Investment Division offers clients the latest updates on the stock prices and trading of stocks. To this effect.operating result of the economic activities undertaken and financial position of the entity. this department arranges various training programs for the bank employees both at the Bank’s own Training Institute at Motijheel Shara Tower. Dhaka bank introduces its own ATM network and introduces innovative. some standard reporting formats are used and the formats are prescribed by the local laws and by the local or international accounting standards. HR department emphasizes on training and development in order to minimize the knowledge and skill gaps and enhance business awareness among the bank employees. Treasury Division: Interest risk. reliability and strong focus on service to make the Dhaka Bank Limited a successful institution. In this case. asset quality and brand building continued to be the corners of its retail banking strategy. The facility may 20 | P a g e .Dhaka Stock Exchange and Chittagong Stock Exchange. product innovation. Dhaka bank further consolidated its position as a leading bank in the country’s consumer banking arena. In 2010. equity position risk. foreign exchange risk and commodity risk are monitored by the treasury division. The Bank actively participates in the screen-based On-Line Trading of both the Stock Exchanges to purchase and sell shares and debentures on behalf of its clients. Human Resources Development: Dhaka bank’s employees work with competence. Investment Division: Dhaka Bank Limited is a member of the two leading bourses of the country .
They also donated Bangladesh Institute of Research and Rehabilitation in Diabetes. Presently we are doing SME banking through six branches and planning to expand the business through more rural branches with a target of substantial loan disbursement. They have also taken numerous initiatives towards social welfare and community development. Because customers are very well known about substitute and they do prefer to build relation with such organization. They have also have a partnership with south Asia enterprise development facility foe capacity building of the employees of Dhaka bank limited for doing SME banking. For this program U. SME Banking: Dhaka bank limited has started its journey for SME operation since 2003 to extend to small and medium sector who has difficulty in credit access from formal financial system.S. They allocate 2% of their tax profit for CSR practices each year.be availed by maintaining an account with the Investment Division. Dhaka Bank is committed to their corporate responsibility toward the community. which really thinks about CSR. 2. A minimum balance is required to be maintained in the account whilst a Commission is charged for undertaking the trade deals.22 Corporate Social Responsibility In the era of Societal Marketing Concept. each organization has to pay attention to customers and society. Center for Women and Child Health (CWCH) Bangladesh Eye Foundation 21 | P a g e . Endocrine & Metabolic Disorders (BIRDEM). agency for international development is associated with Dhaka bank limited.
SEID Trust Motijheel Govt. which further consolidated its position in the market in terms of quality services to the customers and value addition for the shareholders. 2. Ratio Analysis 22 | P a g e . Boys High School Ideal School and College BADC High School Bangladesh under-19 Cricket team 20th Bangladesh International Junior Tennis Dhaka Bank Independence Day Inter Club Tennis and Squash Tournament 2006 Pacific Hospital Limited for treatment of poor patients Chhayanaut Anti-Drug Campaign in Chittagong Shahid Ziaur Rahman Shishu Hospital Individual assistance for treatment.23 Profitability Measures Dhaka bank limited is high performing private commercial bank.
Dhaka bank’s Net Profit Margin has been steadily increasing over the past years.56 2009 3. The level and historical trends of these ratios can be used to make inferences about a company's financial condition. a. a financial ratio can give a financial analyst an excellent picture of a company's situation and the trends that are developing. Net bank operating margin 2007 3.61 Net bank operating margin= (Total Operating Revenue-Total Operating Expenses) /Total Assets 23 | P a g e .58% 2009 22.Financial ratio analysis is the calculation of ratios that are derived from the information in a company's financial statements. Here. Financial ratios are calculated from one or more pieces of information from a company's financial statements.65% Table: 1. Net profit margin 2007 Net margin= profit Net Income After Taxes/ Total Operating Revenue 22. Net Profit Margin A low profit margin indicates a low margin of safety: higher risk that a decline in sales will erase profits and result in a net loss. The management has also been very successful in rightly designing and implementing the service pricing policies and controlling the cost. Profit margin is an indicator of a company's pricing policies and its ability to control costs. In context.20% 2008 21. b.50 2008 3. its operations and attractiveness as an investment. three years of past financial data are used to calculate the ratios to measure the financial performance and ability of Dhaka Bank Ltd.
it show how efficiently the management has been able to use the assets of the bank in order to generate operating income. Asset utilization ratio 2007 12. Equity multiplier 2007 18. Dhaka bank has had a steady growth in its Net Bank Operating Margin over the last few years indicating that the management was competent in fully utilization the assets and generating revenue from it. especially the mix and yield on the bank’s assets.40 Asset utilization ratio= (Interest Income + Non Interest Income)/Total Asset Table: 3 Asset Utilization Ratio Interpretation: The asset utilization ratio reflects the portfolio management policies. d. Dhaka bank’s assets utilization ratio has decreased from 2007 to 2009. c.79 2009 15.38 2008 17.79 2009 12.Table: 2 Net Bank Operating Margin This ratio measures the management efficiency. That means the portfolio management policy should be more efficient.57 2008 12.66 Equity multiplier= Total Assets/Total Equity Table: 4 Equity Multiplier 24 | P a g e .
That means the interest expense went up and the spread between interest income and expense narrowed.81 2009 0.76 2008 2. e.97 Earning spread= (Non Interest Income -Non Interest Expense)/Total Assets 25 | P a g e . f. Dhaka Bank’s EM has declined very slowly over the past years. Earning spread 2007 0.74 2008 0.The Equity Multiplier (EM) reflects what percentage of the banks asset has been funded by equity. because interest expenses were greater than the amount of returns generated by investments. Too high of an EM indicates that the bank is heavily funded by liability and hence could be more risky. Net interest margin 2007 2.75 2009 2.Interest Expense)/Total Assets Table: 5 Net Interest Margin It is a performance metric that examines how successful a firm's investment decisions are compared to its debt situations.65 Net interest margin= (Interest Income . A negative value denotes that the firm did not make an optimal decision.
Table: 6 Earning Spread The Earning Spread measures the banks effectiveness in intermediation in borrowing and lending and also the intensity of competition in the industry. Though there is increase in the level of competition in the industry but Dhaka bank has played satisfactory role.93 Tax management efficiency= Net Income After Taxes/Net Income Before Taxes 26 | P a g e .e. Tax management efficiency 2007 45. The ratio has decreased in past years. how the bank has managed its operating cost. Expense efficiency control 2007 Expense efficiency control= (Total Interest Income/Total Earnings Assets) -(Total Interest Expense/Total Interest Bearing Liabilities) Table: 7 Expense Control Efficiency 2.75 2008 2.00 2009 44. The overall earning spread rate has increased in last past years.57 This is a measure of the operating efficiency of the bank i.97 2008 45.85 2009 2. h. That means Dhaka Bank was not good at maintaining and cutting down its costs. g.
32% 27 | P a g e . Dhaka bank has efficiently control the tax management.23 2008 1.23 Return on asset= Net Income After Taxes/ Total Assets Table: 9 Return on Asset The Return on Asset is an indirect measure of management efficiency.97% 2009 19. i. Dhaka bank’s ROA has increased in past years. j. it show how efficiently the management has been able to use the assets of the bank in order to generate income.52% 2008 20. The tax management efficiency seems in steady growth.Table: 8 Tax Management Efficiency The ratio measures how efficient the management has been in controlling the tax effect on net income. Return on asset 2007 1. Return on equity 2007 Return on equity= Net Income After Taxes/Stockholders Equity 22.18 2009 1.
It shows the rate of return flowing to the banks shareholders. That indicates it was efficient in generating revenue from loans and advances.60 8.96 2008 2009 l. But again it decreases in 2009. Average liability cost 2007 Average liability cost= Total Interest Expenses/Total Interest Bearing Liabilities 8.97 11. This was mainly because of its decrease in net income over this period of time.45 10.Table: 10 Return on Equity The amount of net income returned as a percentage of shareholders equity. k. Average asset yield 2007 Average asset yield= Total Interest Income/Total Earnings Assets Table: 11 Average Assets Yield This ratio measures how efficient a firm is able to utilize its income earning assets to generate income.39 2008 2009 28 | P a g e . The ratio has increased in 2008 from 2007. Return on equity measures a corporation's profitability by revealing how much profit a company generates with the money shareholders have invested. 10. Dhaka bank has been showing a steady slow down decreasing growth in it ROE over the last few years.22 8.
This shows that the risk exposure for the bank’s debtors and investors has gone up.Table: 12 Average Liability Cost This ratio showed that Dhaka Bank was incurring a very high amount of average liability cost.62 2009 6. If the equity funding relative to the total asset goes down then it may indicate that the risk exposure for the bank’s investors and debtors has increased. Dhaka Bank’s ratio has been steadily increasing over the past few years. So. the bank has to be more efficient in managing its erosion of capital it may not fail due to negative profitability and erosion of its capital. n. a higher amount of interest has to be paid which increased the cost of borrowing for Prime Bank.44 2008 5.39 Equity capital to total asset= Total Equity Capital /Total Assets Table: 13 Equity Capital to Total Assets Such a ratio of equity capital to total asset shows how much cushion the depositors have against the assets of a bank. Equity capital to risk asset 2007 Equity capital to risk asset= Total Equity/Risky Assets 8.80 9. Dhaka Bank has to reduce its borrowing. Equity capital to total asset 2007 5. This was because due to increased borrowing rate.97 2008 2009 29 | P a g e . So.85 9. m.
168 2008 47 2009 0. 0. It indicates what proportion of equity and debt the company is using to finance its assets. The use of equity is slowly decreasing though the ratio is increasing. Total debt ratio 2007 94. Here the total equity has increased relative to the risky assets decreasing the risk of the assets to improvement in value. o.3 8 2009 93.5 6 Table: 16 Total Debt Ratio 2008 94.1 Debt equity ratio= Total Debt/Total Equity p.1 74 Table: 15 Debt Equity Ratio It is the measure of a company's financial leverage calculated by dividing its total liabilities by stockholders' equity.Total Equity)/ Total Assets 30 | P a g e . Debt equity ratio 2007 0.Table: 14 Equity Capital to Risk Assets This ratio reflects how well current bank capital covers potential losses from those assets most likely to decline in value.61 Total debt ratio= (Total Assets .
It has to be more efficient in managing capital structure and fund management. Dhaka bank has 93% debt or tk. The overall ratio analysis shows that in 2009 Dhaka bank’s performance is not satisfactory in generating profit. 93 in debt for every tk. It seems that total debt ratio remain steady in last 3 years. Moreover its debt has increased drastically.The total debt ratio takes into account all debts of all maturities to all creditors. 31 | P a g e . 1 in asset in 2009. So. the borrowings need to reduce.
Duties & Learning Points . Besides I have also worked in General banking Department.3.1 Department of Internship I was assigned to perform my internship in Foreign Trade Department at Foreign Exchange Branch of Dhaka Bank Ltd for a total duration of 03 (three) months (15 th August – 15th November). 32 | P a g e Chapter I 3 Internship Position. I have performed different task in this Department as an intern.
In this period.After 45 days in General Banking. It is one of the most important department and large department of the bank. 3. My different types of task in these two departments are described below: 3.2. Duties and responsibilities at Account opening Department: 33 | P a g e .2 Nature of the Job As a part of internship program. These two departments are General Banking Department and Foreign Trade department. I was posted on the foreign Trade division at the same Branch in Dhaka Bank Ltd. I have worked with 2 departments.1 General banking: General Banking department consists of various sub departments. I was required to learn various types of banking tasks which were assigned by the officers of different departments and the branch manager.
These products are the core sources of deposit. account holder name. My responsibility was to ensure account number. Based on the account mode the bank sets various requirements for its client. I have also learned the important steps regarding account opening and account closing.2 Duties and responsibilities of Foreign Trade Department: Foreign Trade is all about imports and exports. As it was my 34 | P a g e .This is an important section of bank. It deals with the different products. bank name etc. I also have acquainted with the checklist of account opening. The backbones of any foreign trades between nations are those products and services which are being traded to some other location outside a particular country’s borders. Here I have acquainted with different products that the bank offers to acquire deposit. The main responsibility was receiving several cheques from clients and give seal in the front side of the cheque and at the back side endorsement seal. Opening Saving Account Opening DPS (Deposit Pension Scheme) Issuing Cheque Book Pay-order issuing and entry in register book. Following are the list of my observation Opening Current Account. Duties and responsibilities of Clearing Section: I have worked total more than 15 days in this section. And also I also kept records of several cheques. From the foreign trade department I have learnt a lot.2. 3.
face to face conversation with the bank officers and other secondary sources. It involves intense file work.report related functions I tried to learn more and more about the foreign trade. But as there were huge pressures in this department I cannot gather a lot from them. The foreign trade department of Dhaka Bank Foreign Exchange Branch consists of two bank officials. including department Head. Filing huge number of L/C related document. Issuing Export form. Being an intern I had limited authority regarding financing and other delicate activities. LCAF register. Most of my knowledge was gathered through observing activities of officers. Date entry of each bill of entry. Preparing Non . 35 | P a g e . The foreign trade in Dhaka bank Ltd. Updating Export Registrar. Preparing and updating files against each L/C Update L/C register. Bill of Entry register.nego letter. is a prolonged process. As an intern I assisted each of them in their work. Preparing and sending letters to the customers. for example.
1 About Foreign Trade The continuing global tendency towards the free flow of business and monetary infusions across nations describes globalization which helps in the formation of international financial system. . 36 | P a g e Chapter I 4 Foreign Trade Activities of Dhaka Bank Ltd. It provides economic independence and triggers competition stimulating globalization to elevate the living standard of people in the nations that offer themselves to the world trade.4.
Generally speaking. Some nations are adept at producing certain products at a cost-effective price. Foreign Trade can be considered a number of different things. Previously.The banking scenario in Bangladesh has already gained all the momentum. No matter what the reason. It bridges between importers and exporters. These banks are known as authorized Dealers. depending on the type of trade one is talking about. which meant that banks aimed at higher profit maximization. banks focused on the ‘revenue’ model which is equal to cost plus profit.2 Foreign Trade Department Goals and Functions Foreign exchange department is international department of the bank. it is essential to focus on cost saving. though this is a less common use of them. The backbone of any foreign trade between nations is those products and services which are being traded to some other location outside a particular country’s borders. 4. export and foreign remittance and post import financing. it can remit foreign exchange from local country to foreign country. If the branch is authorized dealer in foreign exchange market. Post the banking reforms. Foreign Trade is all about import and export. the ability of some nations to produce what other nations want is what makes foreign trade work. with the domestic and international banks gathering peace. This means that all the resources should be used efficiently to better the productivity and ensure a win-win situation. 37 | P a g e . foreign trade means trading goods and services that are detained for a country other than their country of origin. banks shifted their approach to the ‘profit’ model. To survive in the long run. Foreign trade can also be investing in foreign securities. It deals with globally and facilitates international trade through its various modes of services. Perhaps it is because they have the labor supply or abundant natural resources which make up the raw materials needed. The focus of all banks in Bangladesh has shifted their approach to ‘cost’. determined by revenue minus profit. Foreign Trade Department is a very imperative one that deals with import.
Governments’ import & export policy is another important factor for import and export operation of banks. Foreign Exchange branch operates following types of activities: 38 | P a g e .3 Foreign Trade Activities of Dhaka Bank Limited Foreign Exchange Branch: Foreign trade can be considered a number of different things. 4. This is why this department is called foreign exchange department. Among these. depending on the type of trade one is talking about. 1950 is for documentary credits. 1947 is for dealing in foreign exchange business. Some national and international laws regulate functions of this department. and import and export control Act. Foreign exchange Act. The Foreign Trade Department of Dhaka Bank Ltd.This department mainly deals with foreign currency.
These are mentioned above in the chart. firms and Government organizations import foreign goods or services to meet their various necessities. Import.making and reduction of cost as well. Recently Dhaka Bank Ltd. Export. 4. One of the important 39 | P a g e .1. The import/export related processing and credit operations are centrally controlled and monitored by the CPC for efficient and effective decision.4. The center maintains its accounting records in the general ledger of the respective branches. It gives most of the export import service as the instruction of its head office.The Foreign Trade Department of Dhaka Bank Limited Foreign Exchange Branch normally does three types of activity. Remittance these are common for all the branches of DBL. Normally consumers. This branch is one of the largest branches of DBL. In the foreign trade department of DBL FEX they usually do the above three functions on their day to day business. Introduction Import is the flow of goods and services purchased by economic agent staying in the country from economic agent staying abroad. established th e central processing Center for Trade & Credit Operations. The person or organizations who import goods & services from foreign countries is known as importer.4 Import 4.
public notice.3. As of 31st December 2008 their import volume was Tk. Authorized Dealer Banks will import the goods into Bangladesh following import policy.2. 1950. firms and Governments in Bangladesh. shall as usual apply in case of import of those items.4. which are not. circular & other instructions from competent authorities from time to time.737 million compared to the volume of 2007 for Tk. • Restricted list: Any item. 4. which is restricted by the "Import Policy Order 2006 -2009" in Annexure i(b) shall be importable only on fulfillment of the conditions (b) specified therein against the item. F.4. the conditions restrictions and procedures for import of various items mentioned in the test portion of this order. The major import items of the year were: • Capital Machinery scrap vessel 40 | P a g e . In addition to the conditions mentioned in the Restricted and Banned lists. eggs of shrimps and prawns etc. 49. 4. General provision for import: Regulation of import . 65. Import Trade of Bangladesh is controlled under the Import & Export Control Act (IEC).Import of goods under this order shall be regulated as under: • Banned list: Banned goods are not allowed to import through the foreign exchange transaction. • Free importable items: The items.496 million marking an increase of 33% from the year. Dhaka Bank Limited was active in extending services to their valued clients related with import business. Such as Live swine.functions of the commercial banks in the world is to undertake import of merchandise into the country and payment of foreign exchange towards the cost of the merchandise to foreign suppliers. included either in the Banned list or restricted list shall be freely importable. In the year 2008.E. Import Position of DBL Imports are foreign goods and services purchased by consumers.
And to serve its client's demand to import goods. Dhaka Bank Limited. it always maintains required formalities that are collectively termed as The Import Procedure. Procedure of import from importers side: 41 | P a g e .4. Imamgonj Branch is always committed to facilitate import of different goods into Bangladesh from the foreign countries. Figure: 7 Import of Dhaka Bank Limited 4.• • • • • • Hot rolled non alloy steel HDPE Raw cotton Fabrics & Accessories Fertilizers and edible oil Oil seeds. Import Procedure followed by DBL As an Authorized Dealer.4. Import Section of the branch is assigned to perform this job.
Import Mechanism To import. 4. approval from concerned authority to be needed) e) f) g) h) i) To formal request place to the Bank to open L/C.4. According to Import and Export Control Act.5. To get Insurance Cover Note with money receipt. After taken delivery of imported goods from the Custom Authority the importer deposit the B/E (Bill of Entry) to the Bank. 1950.a) b) c) d) To open an account with a Bank. To sign IMP (this part is not mandatory as it is now computer generated form). To get IRC (Import Registration Certificate) from CCI & E. To get TIN and VAT no. a person should be competent to be an ‘IMPORTER’. To procure Pro-forma Invoice / Indent (In case of some selective items. To fill up the L/C Application Form mentioning required various clauses. the Office of Chief Controller Import and Export provides the registration (IRC) to the 42 | P a g e . which ensure that Goods have entered in the country. Submitting all the papers to the bank. To sign LCAF (It may be registered or not). the importer can apply for opening L/C.
4. Back-to-Back L/C and Cash L/C. And then a person becomes a qualified importer. 43 | P a g e .importer. He is the person who requests or instructs the opening bank to open an L/C. Follow-up of Back-to-Back overdue bill.6. Matching of Bill of Entry with IMP. Correspondence Regarding. After obtaining this the person has to secure a letter of credit authorization (LCA) from Bangladesh Bank. Maintenance of Due Date Diary. Foreign Correspondence related to above. Audit Compliances. Follow-up of pending Bill of Entry Quarterly Statement.7. He is also called opener or applicant of the credit.4. Things Done Here The following things are done in this department: • • • • • • • • • Total supervision of Import Department (Back to Back/Cash). Functions of Import Section The functions of this section are mainly to deal with various components such as: • • • • Letter of Credit (LC) Payment against Document (PAD) Payment against Trust Receipt (PTR) Loan against Imported Merchandise (LIM) 4. 4. Maintenance and record of related L/C Documents. Payment of Back-to-Back L/C and endorsement of Export L/c against payment.
Balancing of L/C Contingent Liability Back to Back L/C Follow-up of Sub-Judaic bills and maintaining liaison with Head Office and Foreign Correspondent. L/C Opening and Amendment of Cash/ Inland L/C. Batch checking. • • • • • • • • • • Checking. EPB & other regulatory bodies. • Supervision of checking. Maintenance and record of Pass Book and IRC. Statement of Outstanding accepted import bills under Back-to-Back L/C. Lodgment. 44 | P a g e . Retirement of Import documents under Back-to-Back L/C Issuance of Shipping Guarantee (Back-to-Back L/C) IMP Form Fill-up (Cash L/C) Inform negotiating Bank about maturity date of Back-to-Back L/C Quarterly statement for Bonded Ware House Balancing of Accepted Liability. • Issuance of Certificate and attestation of papers/ documents of garments clients as required by BGME. L/C opening / Amendment (Back to Back L/C) Endorsement of Export L/C when opening. Maintenance and Record of related L/C (s) & documents.• • • • • • Batch Checking. Lodgment and retirement of Import documents under Back-toBack L/C.
L/C Retirement. L/C Lodgment (Cash). 45 | P a g e . Issuance of shipping guarantees (cash) IMP forms fill-up (Cash). Statement of IRC Renewal fees to CCI &E> Preparation of monthly foreign exchange business position. Follow-up of Outstanding BLC. LCA Issue. Proof Sheet of L/C Margin and Contingent Liability (Cash L/C). Checking of Cash L/C documents. BLC Statement.• • • • • • • • • • • • • Credit Report. Differed Payment (Cash). Correspondent (Cash L/C).
4.5. Export 4.5.1. Introduction
The term “export” is derived from the conceptual meaning as to ship the goods and services out of the port of a country. The seller of such goods and services is referred to as an “exporter” who is based in the country of export whereas the overseas based buyer is referred to as an “importer”. In International Trade, “exports” refers to selling goods and services produced in home country to other markets.
4.5.2. Export department
The goods and services sold by Bangladesh to foreign households, businessmen and Government are called export. The export trade of the country is regulated by the Imports and Exports (control) Act, 1950. There are a number of formalities, which an exporter has to fulfill before and after shipment of goods. The exports from Bangladesh are subject to export trade control exercised by the Ministry of Commerce through Chief Controller of Imports and Exports (CCI & E). No exporter is allowed to export any commodity permissible for export from Bangladesh unless he is registered with CCI & E and holds valid Export Registration Certificate (ERC). The ERC is required to be renewed every year. The ERC number is to be incorporated on EXP forms and other documents connected with exports.
Figure: 8 Export of Dhaka Bank Limited
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Dhaka Bank Limited experienced sound growth of export business in 2008 from 2007. The volume of export business rose to Tk. 39,038 million from Tk. 31,081 million showing an increase of 26%. As before, readymade garments still remained the major export item of 2008.The other export items are jute, accessories (buttons, interlings, labels etc.) and footwear etc. a) Highest Priority Sectors
1. Software and ICT services; 2. Agro-products & agro-processing products; 3. Light engineering products incl. auto-parts and by-cycles); 4. Leather products; 5. High-value ready-made garments.
b) Special Development Sectors 1. Pharmaceutical products; 2. Cosmetics and toiletries; 3. Luggage and fashion items; 4. Electronics items; 5. C.R. Coil; 6. Cards & calendars; 7. Stationery products; 8. Silk fabrics; 9. Handicrafts; 10. Herbal medicine and medicinal plants.
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4.5.3. Export procedure The following steps should be maintained at the time of exporting: • Registration of exporters: First the exporter need to register with CCI&E and must holds a valid certificate. • Obtaining export certificate: After that an exporter need to apply and collect the export registration. • Securing the order: after getting a valid registration the exporter may proceed to secure the export order. • Signing the order: In this stage the exporter need to details about the commodity should be described properly. • Receiving the letterof Credit: Then the exporter receives the letter of credit. • Procuring of materials: After having the deal and on having the letter of credit the exporter will go for procuring. • Shipment of Goods: The following are the documents normally involved at the time of shipmentEXP form, photocopy of the registration certificate, photocopy of the contract, photocopy of L/C, Transportation receipt, Shipping instruction, Insurance policy • Preparation of procurement of export document. • Submission of the document to the bank for negotiating.
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49 | P a g e . Follow-up for realization of Export Proceeds. FDBC.5. Lodgment of Export Bills (FBP.IBP & IBC) Preparation of tickets elating to negotiation of documents. Compliance of Audit & Inspection. FDBC and Inland Bills.4. • • • • • • • • Recording of Export L/C particulars in Export L/C Transfer Register Realization of transfer changes. Authentication of L/C and Amendments from other Correspondent Bank.4. Certificate of EXP forms. Advising of Export L/C to the beneficiary. Issuance of provides realization certificates. Maintenance of all records related to FBP. All correspondence relating to Export Department. Transfer of Export L/C to the 2nd Beneficiary & issuance of notice of transfer to L/C issuing Bank. Things Done Here The following things are done in this department: • • • • • • • Scrutiny of Export Shipping Documents. And other works as & when directed by the manager and Sub-Manager.
• • Balancing of FBP. a power to do something. The L/C process normally involves two banks. the exporter's bank and the importer's bank. The issuing bank is substituting its credit for that of the importer. Preparation of Statement and all returns to Bangladesh Bank and Head Office (Weekly/ Monthly/ Quarterly). Letter of Credit is an arrangement whereby a bank acting at the request and in accordance with the instructions of a customer is to make payment to or to the order of a beneficiary or is to pay 50 | P a g e .1 Overview of Letter of Credit (L/C) This is an undertaking by a bank to make payments on behalf of a specified party to a beneficiary under specified conditions. 4. By opening letter of credit on behalf of a buyer and in favor of a seller. Thus. the buyers and sellers are of different countries. This is as long as the seller performs their duties to an extent that meets the requirements contained in the letter of credit. the buyer wants to be assured of goods and the seller to be assured of payments. In such a situation commercial banks assure these things simultaneously by opening letter of credit guaranteeing payment to seller and goods to buyers. FDBC. commercial banks undertake to make payment to a seller subject to submission of documents drawn in strict compliance with the terms of the letter of credit giving title to goods to the buyer. None of them know each other nor about their business integrity and creditworthiness. which in turn is derivated of the latin word ‘accreditivus’. This applies to any defense relating to the underlying contract of sale. The beneficiary (Exporter) is paid upon presentation of the required documents incompliance with the terms of the L/C.6. Various regulations prevailing in their respective countries about foreign trade are also unknown to them. meaning trust.6 Letter of Credit (L/C) The English name “Letter of Credit” derives from the French word “accreditation”. 4. provided the exporter complies with the terms and conditions of the L/C. It has essentially guaranteed payment to the exporter. In any international trade. and IPB & A/R Export A/Cs.
Whether the price of commodity is reasonable and competitive. Exchange Control Regulations.Application 6.Documents 6. Import Trade Regulations. The form of the letter of credit varies from bank to bank (at present but not earlier). Marketability of goods.Money for LC 5.Money ADVISING/PAYING/ (CONFERMING) BANK ISSUING/ OPENING BANK 51 | P a g e .Advice of LC 1. Supplier's creditworthiness report.Documents 9. Goods APPLICANT/ BUYER/ IMPORTER 3. BENEFICIARY/ SELLER/ EXPORTER 4. Money 3. All the parties to a letter of credit must have the same understanding about the terms and conditions used in the credit.While opening letter of credit at the request of a buyer/importer. we normally examine the following: i) ii) iii) iv) v) vi) Buyer's Credit worthiness.accept or negotiate Bill of Exchange drawn by the beneficiary against stipulated documents and compliance with stipulated terms and conditions. The International Chamber of Commerce has formulated the "Uniform Customs and Practice for Documentary Credits" to avoid the scope for ambiguities and differences in interpretation of terms of the credit.
Note that the rules say the advising bank must take "reasonable 52 | P a g e . the exporter and the issuing bank are the parties to the letter of credit. There is however one or more than one banks involved in various capacities and at various stages to play an important of the credit.6. and usually the importer of the goods. The importer. operation ii) The Beneficiary (Exporter): The exporter in whose favor the credit is opened and too whom the letter of credit is addressed is known as the beneficiary.LC Figure: 9 The L/C 4. and is responsible for verifying the genuineness of the credit by checking of signatures or telex test keys. by issuing the credit in favor of the beneficiary. the buyer. iv) Advising bank: Advising bank is the agent bank of the issuing bank in the country of the sellers. iii) The Issuing Bank (Opening Bank): Issuing bank is the applicant's bank which. i.2 Parties involved to a Letter of Credit A letter of credit is issued by a bank at the request of an importer in favor of an exporter from whom the importer has contracted to purchases some commodity/commodities.7. Beneficiary is the seller of the goods in whose favor the credit is issued. gives its undertaking that the beneficiary's drawings will be honored provided that all the terms of the credit are complied with.e. i) The Buyer (Importer): Applicant is the party who applies to the issuing bank for the issue of the credit.Documents 2.
then L/C issuing Bank requests to any reputed third Bank (with whom L/C opening bank has credit line) to provide additional confirmation regarding payment documents of the credit. v) The Negotiating Bank: This the bank that honored the documents presented as per letter of credit. beneficiary's Bank to make payment against the L/C documents on behalf of L/C issuing Bank. against the 53 | P a g e .care" in such verification. The negotiating bank has to be careful in scrutinize that the draft and the documents attached there to are in conformity with the condition laid down in the letter of credit. When beneficiary of the credit wants such type of undertaking to the L/C issuing Bank. and since reasonable care has yet to be defined that it may be the more than that simple checking of signatures would be required in certain circumstances. vi) Confirming bank: Confirming bank is a bank who gives its own undertaking to the seller's Bank i.e.
4. time and place of delivery. Then the buyer will contract its bank to have a letter of credit issued with the seller as beneficiary. A buyer and a seller agree upon a transaction through a contract the specifies price. This letter of credit can either be funded by a loan or simply debited from the buyers account balance if sufficient funding is 54 | P a g e . The following figure shows L/C process in four separate phases.6.3 Steps in a L/C There are four steps in a L/C process. quantity. 1 Seller ’s Bank Buyer ’s Bank 2 Seller’ s Bank Buyer ’s Bank Letter of Credit Sel ler Bu ye Contract r Se lle r Bill of Lading Bu ye r Consignment Shipper Shipper 3 Seller ’s Bank Buyer’ s Bank 4 Seller’ s Bank Buyer’ s Bank Payment Sel ler Bill of Lading Bu yer Se lle r Bill of Lading Bu yer Shipper Consignment Shipper Figure: 10 The above figure provides the steps involved in a simple international transaction between a seller and a buyer: 1.
After it has been confirmed.available. often by a neutral third party. The buyer is finally able to provide the bill of lading to the shipper and claim the consignment. warehouses. The seller can then present to bill of lading to its bank as an additional condition being meet to secure final payment. 3. such as damage and delays. 4. It is important to underline that payment is not necessarily provided to the seller immediately after the bill of lading is provided. Insurance is commonly required as a condition to issue a letter of credit so that varios risks. depending n its value and complexity. The bill of lading is then forwarded to the buyer’s bank in exchange of payment and afterwards to the buyers so that the consignment can be claimed once delivered. With the letter of credit the seller now has a line of credit available at its bank and final payment will be made once the delivery conditions of the contract are satisfied. it is subject to standard underwriting procedures involving a down payment. can be mitigated. The seller can then provide the consignment to a shipper in exchange of a bill of lading promising that the consignment will be delivered at the agreed destination. The bank commonly levies a fee ranging from 1 to 8% of the transaction. It is estimated that large commercial bank finance about 90% of all global trade transactions. rail or trucks segments depending on the concerned transport chain. 55 | P a g e . quality and condition). a line of credit and interest rate based upon the buyer’s credit worthiness. that the consignment meets the terms of the contract the seller can claim final payment from its bank from the funds that were previously deposited. If a loan is used. 2. If for any reason the letter of credit cannot be cleared and payment made the transaction cannot take place. At this point the consignment is handled by the transportation system and can involve the usage of port facilities. but after the buyer has taken ownership of the consignment and confirmed that it meets the specification stated in the contract (quantity.
Wheat .News print .6.4 Documents required for opening L/C An importer or L/C opener has to submit the following documents: • • • • • • • • Application form (provided by the bank). .6. 4. Pro Forma invoice.Pace maker .Raw cottons . Import registration certificate.Textiles .Machineries of radio channel .Weaving Mills Accessories .Poultry Feeds .5 Regular L/C items for Dhaka Bank Ltd. Four sets of IMP form.4.Jewelry 56 | P a g e .Industrial Chemicals .Books .Fabrics . Insurance cover note.Surgical.Garment Accessories . Tax registration number.Truck . VAT registration number.Rice . Dental and Medical Equipments .News papers & magazines .Yarn .Bus .Patent & Farinaceous Food . Letter of Credit authorization form.
Europe. This has significantly increased the flow of foreign remittance through their bank sent by Non Resident Bangladeshis living in different parts of the world.9.7. 57 | P a g e . one of the major remittance exchange house in UAE and two Micro Finance Institutions (MGO) in Bangladesh to use their 300 plus locations for disbursement of foreign remittance. Shortly Dhaka Bank remittance wing will be spreader to Spain. And Middle East having a market share of 2% in remittance business in Bangladesh. Mauritius. and South East Asia. During the year 2009. Foreign Remittance With the pace of growth in the volume in inward foreign remittance. Extensive use of the technology along with large delivery network has significantly fostered the growth of DBL remittance business. At present Dhaka Bank has arrangement with 20 Exchange Houses in North America. they have opened branches in different locations and also established remittance arrangements with good number of leading exchange Companies around the globe. To bolster their remittance business. 32% from Europe and 50% from Middle-east countries. Dhaka Bank has channeled tk. As part of our strategic initiative. recently they have tied up with Al Ahalia Exchange Company. Dhaka Bank Limited has also taken the initiative to affiliate with a cellular operator to bring the latest technology and vast distribution channels of serve the beneficiaries of inward foreign wage remittance in new dimension. Dhaka Bank Limited stands among the top 10 private sector commercial banks in the Bangladesh remittance market within a very short span of time.4.786 million of foreign remittance of which 25% from North America.
7. Encashment of TCs & Cash Dllar and sterling Pound. Correspondence with different Bank/ Institution related to TC / Dollar.4. Cheque and preparations of F. Withdrawal from F. Bangladesh Bank Clearing Cheque Collection. Foreign Collection.P. Compliance of Audit & Inspection. 58 | P a g e . Preparation of related statements including convertible Taka Accounts Preparation of IBCA & IBDA and Balancing of Collection and other special assignment as desired by department In charge. Foreign TT payment and Purchase of foreign Drafts. Checking of all Batches. Issuance of outward TT & FDD.B. Account. which comes from all branch of ABBL. Trading Blotter. Assist in preparation of IBCA/ IBDA etc. Issuance of PRC Statement & all related works regarding deposit of Bangladesh Bank.C. Issuance of TC and Cash Dollar.1 Activities of Foreign Remittance The following activities are done: • • • • • • • • • • • • • • • • • Overall supervision of Foreign Remittance Department Correspondence to Nostro Account. Deduction of Tax and VAT.
2 Types of Remittance Remittance can be classified in two types.• • • Students Case handling & preparation of related statements ( Head Office and Bangladesh Bank). Balancing of Account Statements. 4.7. Batch posting and all related statements. The two types of remittances are stated below: Figure: 11 Types of Remittance 59 | P a g e .
and banker’s demand draft (D/D).7. In DBL the main sources of inward remittances are mentioned in the figure: 60 | P a g e .3. among which T/T and D/D are used most commonly. the foreign correspondent banks or sisterbranches remits the fund into the domestic bank and instructs it to pay the fund to the payee. mail transfer (M/T).4. Inward Remittance The way of settlement that entrusted by the customers. The way of remittance includes telegraphic transfer (T/T).
Procedures of Handling Inward Remittance The operation flow telegraphic transfer is expressed in bold line and draft transfer in dotted line. Importer / Remitter 1 Remitting Order Remitting Bank 3 /4 Funds Transf er 2 Remittance Instructions 2 Deliver the draft Dhaka Bank Ltd.7. (Paying Bank) 4/5 Pay the remittance 3 Present the draft Exporter / Payee 61 | P a g e .4.4.
There was a huge difference between 2006 and 2009. After that the contribution was decreasing.Figure: 12 Procedures of Handling Inward Remittance 4. 62 | P a g e .5 Last five years Inward remittance contribution of DBL Figure in Million 2005 3377 2006 2007 2008 16764 10609 11834 Table: 17 Inward Remittance Position of DBL 2009 9786 Figure: 13 From the above figure we find that the contribution of DBL in foreign remittance in the year 2006 is more that the other years. The impact of financial recession is the main reason for decreasing the amount of inward remittance in the year 2009.7.
7. among which telegraphic transfer and draft transfer are used most commonly.6. Outward Remittance Outward remittance means the remitting bank. entrusted by the remitter. remit funds to his sisterbanks or his correspondent banks by the certain instrument and instruct them to pay the certain amount to the nominated payee. the outward remittance goes from mainly from the sources mentioned in the figure: 63 | P a g e . The instruments of remittance includes telegraphic transfer (TT).4. In Dhaka Bank Ltd. mail transfer (MT). and draft transfer (DD).
7. and draft transfer in dotted line.4. TALEX) The Paying Bank 3 Surrender the draft 3 / 5 pay the remittance 6 Present the draft The Exporter / the Remitter Figure: 14 Procedures of Handling Outward Remittance 64 | P a g e . Procedures to Handle Outward Remittance The Operational flow telegraphic transfer and mail transfer are expressed in bold line.7. The exporters / Remitter 1 Submit Application 2 Drawing the Draft Dhaka Bank Ltd. Issue the remittance instruction (SWIFT.
Demand drafts are marketed as a relatively secure method for cashing checks.8. meaning a cable message from one bank to another in order to affect the transfer of money. 65 | P a g e .4. It is also known as: “Remotely created checks”. Instruments used in Remittance Both the remittances inward and outward in favor of beneficiaries may be made in by any one of the following manners: • By issuing Demand Drafts A method used by individuals to make transfer payments from one bank account to another. • • By issuing mail Transfer By issuing Telegraphic Transfer A banking term commonly called “T/T”. The major difference between demand drafts and normal checks is that demand drafts do not require a signature in order to be cashed.
66 | P a g e Chapter I 5 Analysis & Findings .
63% February 7 26.67% May 10 17.82 64.1.68 105.1 Analysis 5.73 177.5.30% June 12 12.65 395.84 135.1 Comparative Analysis of Import Position of Dhaka Bank Limited foreign Exchange Branch: Amount in Lac Taka Budget Achievement Achievement(% ) January 8 31.67% Figure: 15 From the above figure we see that through January to June the overall achievement was good except April and moreover we see the achievement was highly satisfied in January (budget: 8 67 | P a g e .5% Table: 18 April 9 5.57% March 8 10.57 379.
expectation of the imports affects the growth in May and June.lac. 5.2 Trend of growth of Import of DBL FEX Figure: 16 From the figure we see that there is a downward trend in import achievement because of exchange rate movement but the worst case was in February and March because there was a drastic fall from February to March later it recovers in May and again it falls down in June for the same reason. 68 | P a g e . achievement 31.65 lac) and February (budget: 7 lac.57 lac) Due to budget declaration. achievement: 26.1.
75 February 33 3189.1.49 -74 June 27 233.34 -14 April 25 1045.8 May 15 270.26%.29 14.29 then it starts falling up to May and reaches at 270. 69 | P a g e .3 Analysis of Import Bills of DBL FEX Amount in Lac Taka Month No Amount Growth(%) January 15 200.89 March 31 2742.97 7.62 -188.8.131.52 Table: 19 Figure: 17 From the figure we see that DBL Foreign Exchange Branch starts with a low amount of import bill collection later in February it reaches at peak with amount of 3189. Then there is again a rise in June by 7.
71% March 9 10.80% June 10 19. February and April and the highest achievements are in May and June which are almost doubled of its budgeted amount.61 196.50% February 7 6.68 196.11% Table: 20 April 9 8.35 90.4 Comparative Analysis of Export Position of Dhaka Bank Limited foreign Exchange Branch: Amount in Lac Taka Budget Achievement Achievement(% ) January 8 3.77 97.44% May 10 19.09 112.72 46.1. 70 | P a g e .5.10% Figure: 18 From the above figure we can see that in case of export DBL FEX’s achievement is greater than its budget except the month January.
5.1.5 Trend of Growth of Export Position of DBL FEX
Figure: 19 This figure shows that the growth of export achievement is increasing except for the month of April (when it down to 97.44%) and there is a rise in May and after that the growth is Flat until June.
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5.1.6 Analysis of Export Bills of DBL FEX
Amount in Lac Taka
No. Amount Growth
January 22 372.71
February 32 635.40 70
March April 52 41 1009.57 876.87 58.9 -13 Table: 21
May 67 1958.18 123.3
June 74 1961.24 15.6
Figure: 20 This figure shows that except a slight fall from March to April export bill amount is increasing and remains flat in May and June.
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5.1.7 L/C Position of DBL FEX
No. of L/C’s opened during the period January 2010 – June 2010 Foreign Local January 27 3 February 21 2 March April 15 17 4 2 Table: 22 May 22 2 June 17 2
Figure: 21 From the above chart we see that in the month of January the highest no. of L/Cs are opened as foreign L/C it is a total of 30. January DBL FEX opened the highest no. of L/C as foreign L/C and the no is 27. Analyzing the 6 months L/Cs January is the highest to open the L/C. And the trend shows that Foreign L/C is opened more than the local L/C.
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87 -58.8 March 1023.91 February 2569.51 -29.30 -2.26 300 56.09 100 62.60 -43.35 -32. 56. 3075.40 -60. On the other hand the local L/C was highest in the month of June (Tk.June 2010 Amount in Lac Taka Foreign Growth(%) Local 89.4 June 1162. The amount is 3075. Except the month of march and April it is more or less in good position comparing the other months. 74 | P a g e .27 105.91 lac.91 lac Taka as forerign L/c. bank is getting fewer contracts.41 Table: 23 Figure: 22 From this figure we can see that in the month of January it achieves the highest amount of L/C which is Tk.82 Growth(% ) January 3075. 105.6 lac) due to increased competition.Amount of L/C’s opened in January 2010.57 May 1716.51 86.45 87.51 Lac) and lowest in the Month of May ( Tk.17 61.54 April 428.69 -16.
75 | P a g e .46 -98.55 -73 March 9 46. As it is highest in January and May but in the other months are decreasing.96 -89.90 484.76 April 5 18.57 June 3 11. Amount Growth(% ) January 9 139.1.80 -59.11 Table: 24 Figure: 23 This figure shows the Inward Remittance position of DBL FEX in last six months is not in a good situation they in the ups and downs position.53 May 10 109.5.8 Inward Remittance Position of DBL FEX Amount in Lac Taka No.25 February 7 37. The main reason is identified as the global financial recession.
26 Table: 25 Figure: 24 From the above figure we can see that outward remittance position was good in the month of March.9 Outward Remittance Position of DBL FEX Amount in Lac Taka No.75 103.86 -85.9 May 14 154.14 March 11 541.5.94 June 18 195. 76 | P a g e . Comparing this month the other months are not so good and 3 to 5 times less than the month of March. Amount Growth(% ) January 14 108.98 -7.03 435.75 February 8 100.77 April 11 75.1.40 26.
77 | P a g e . Comparing this month the other months are not so good and 3 to 5 times less than the month of March.10 Comparison between Inward and Outward Remittance position of DBL FEX of the month January 2010 – June 2010 Figure: 25 The above figure shows the comparison between inward and outward remittance for the month January 2010 – June 2010.1. From the above figure we can see that outward remittance position was good in the month of March. 139. The inward remittance position of DBL FEX in last six months is in the ups and downs position. 109. As it is highest n January (Tk.5.9 Lac) but in the other months are decreasing.25 Lac) and May (Tk. The main reason of decreasing is the financial recession in the abroad countries.
39 173.50% March 0.38 47.11 Comparative Analysis of Remittance for the period of January 2010.80 0.80 1.80 0.19 23.09 136.00% Figure: 26 78 | P a g e .46 57.80 0.80 0.50% May 0.75% February 0.1.25% June 0.June 2010 Amount in Lac Taka Budget Achievement Achievement(% ) January 0.80 1.50% Table: 26 April 0.12 15.5.
92 58019. The table below is shown the five years data of total import in Bangladesh & total imports in Dhaka Bank and its other three competitors’ Prime bank Ltd. Year 2009 2008 2007 2006 2005 CAGR Total Import of Bangladesh 1548215 1483720 1192212 1133070 1105054 6. This situation also continues after 2003. 5.34 35125. the average annual import growth rates of Bangladesh are much higher than those of the world during 1980-90.2.1 DHAKA BANK’S CONTRIBUTION IN TOTAL IMPORT OF BANGLADESH This section shows different analysis of import section for recent five years 2009. 2006 and 2005.2 Import-Export Scenario Although Bangladesh’s import position is behind that of the Asian developing countries.01 15. Rest of the months the branch couldn’t achieve the budgeted amount. Dutch Bangla Bank Ltd. And comparing to other banks its import business is not satisfactory.98% Dhaka bank 46160 65737 49496 46277 30213 8.As the entire six months budget for remittance was 0. DBL is doing a good business up to 2008 as its import volume increases but in 2009 its import is decreased so much.3 19. 5.25%).07% DBBL 53088. In the Import section.77 38470. 19902003 and 2003-2008.75%) and May (13.32% South east Bank 69582.8 Lac the achievement was only satisfactory for the month of January (173.44 35667. 2008.74 32067.12 29079.74 26029.66 43999.06% Table: 27 79 | P a g e .85% Prime Bank 96452 91424 70617 52639 40303 19. The performance of Bangladesh’s export sector in recent years is quite impressive especially in the 1990s when we compare it with that of world and SAARC countries. 2007. and Southeast Bank Ltd.
Following table shows the each bank’s contribution in the total import of Bangladesh: Year Dhaka Bank Prime Bank DBBL South East Bank 2009 2.85%.73% 3.16% 2.23% 3.15% 5. On the other hand among the four banks Prime Bank Ltd.65% 2.43% 6. but it decreased in 2009.06% respectively.91% 2007 4. Dhaka bank has to boost up its import business to lead the market position.49% 2008 4.43% 4. DBBL and Southeast Bank’s rate is 15. Dhaka Bank is in the last position. So.98% which is impressive regarding our recent economic condition.Interpretation: Here we can see that though Dhaka Bank’s import volume was increasing from 2005 to 2008 but it decreased in 2009.32% & 19. The banks’ performance and the contribution in total import are not so good comparing to other banks.92% 2.98% 6.63% Table: 28 80 | P a g e .99% 3.65% 2. The CAGR of the banks are upward and very fast in recent years but the CAGR of Dhaka Bank ltd. is downward.36% 2. Prime Bank is able to attract more clients than its competitors. As well as its compounded annual growth rate is also lower than the other three competitors which is only 8. is leading the import business. In total import of Bangladesh Prime Bank’s contribution is more than the other three banks. Dhaka Bank’s import volume decreased in 2009 into 46160 and it has to face 30% negative growth within one year. But Dhaka Bank’s contribution in total import of Bangladesh is lower than the other three banks. Dhaka Bank’s import volume was increasing from 2005 to 2008.07%. Compound Annual Growth Rate (CAGR): From the above table we can see that the compound annual growth rate (CAGR) of total import in Bangladesh is 6.97% 3.83% 3.08% 4.23% 2006 4.10% 2005 2. Among the four banks Prime Bank is growing very fast in the import business as its compound annual growth rate is 19.
25% less. But other banks contribution is more than Dhaka bank.00% 2.00% 2009 2008 2007 2006 2005 Dhaka Bank Prime Bank DBBL South East Bank Figure: 27 Interpretation: From the above graph and the table we can see the contribution of each of the five banks in total import in Bangladesh. And for this reason its compounded annual growth rate is diminished into 2.98%.08% and in 2005 it 2. As Prime Bank’s contribution is 6.00% 5.98%. In other years the scenario is also same.00% 6.Comparison of Contribution in Total Import 7. in 2008 it was 4. In the graph it is clearly seen that the blue shaded area shown the contribution of Dhaka Bank.23% in 2009 and where Dhaka Bank contributed 3. It is few percentage compared to the whole import amount.73%. Total import in Bangladesh is growing as well as the import of the other banks L/C is growing year by year. in 2006 it 4.15%. The position of Dhaka Bank Ltd may increase the later years than the other banks. Dhaka Bank is also involved in it. In Bangladesh there many scheduled bank and they are involved in import L/C. In 2009 Dhaka bank’s contribution was 2. 81 | P a g e .00% 0. from where we can see that up to 2008 its position was increasing but in 2009 Dhaka Bank’s import business is so depressing. in 2007 it was 4.00% 4. Though Dhaka Bank’s contribution is less than prime Bank but it is doing well than the Dutch banal bank and Southeast Bank up to 2008 but in 2009 its position is decreasing than the other three banks.43%.00% 1.00% 3.
6 28771.51 40083.5.63% Prime Bank 76097 68550 51316 41801 28882 21.36 25874. and Southeast Bank Ltd. Its CAGR is 19.27 33344.2.79% 41162. The Export volume of South East Bank is higher than Dhaka 82 | P a g e .20% Table: 29 Interpretation: The above table shows five years of total export in Bangladesh & total exports in Dhaka Bank. Total export of Bangladesh had decreased in 2009. Dutch Bangla Bank Ltd.47 42178. Dhaka Bank’s export volume also increases in 2005 to 2008.38% 2009 2008 2007 2006 2005 CAGR 33305 39038 31081 23268 13505 19. The annual compound growth rate is 6.79%.2 CONTRIBUTION Year IN TOTAL EXPORT Dhaka bank OF BANGLADESH DBBL South east Bank 46724.1 28.14 34060.63% which is quite impressive. Though the growth is quite impressive but incase of the export volume South East Bank and Prime bank are the leader. Prime bank Ltd.61 13511. but in 2009 the export is decreasing.17 13.17% Total Export of Bangladesh 974457 974981 870222 789306 707003 6.69 22144. The garments sector of Bangladesh has played a vital role in this growth.
00% 6.00% 7.00% 1.00% 2009 2008 2007 2006 2005 Dhaka Bank Prime Bank DBBL South East Bank Figure: 28 Interpretation 83 | P a g e .95% 5.81% 4.57% 5.22% 3.91% 3.13% 1.00% 7.79% 2008 4.03% 4.00% 8.91% Table: 30 Comparison of Contribution in Total Export 9.00% 5.00% 0.28% 2005 1. Dhaka Bank has to enhance its facilities and amend its policies to attract more clients to improve its export position and compete with other banks. So.00% 2.91% 4.42% 7.09% 3.90% 3. but the CAGR of Dhaka Bank is highest because Dhaka Bank’s export volume has increased in a huge amount in 2008 than 2005 but it is lower in 2009.Bank.31% 2006 2.00% 4.30% 4.22% 4.33% 2007 3. Following table shows the each bank’s contribution in the total export of Bangladesh: Year Dhaka Bank Prime Bank DBBL South East Bank 2009 3.00% 3.11% 4.
• In DBL Foreign Exchange Branch the export achievement is greater than its budget except for the month of January.91%. In April it decreased by 64. Garments Industry has absorbed the shock and Overall branch effort on export.67%. in 2008 4. • • • Loosing old clients of foreign trade is one of the main reasons for less export and import volume in 2009.0%. In DBL Foreign Exchange Branch.3 Findings Foreign Trade Department is a very important department of any bank. in 2007 it was 3. In DBL Foreign Exchange Branch. in 2006 it 2. 84 | P a g e .49. It is also seen that total export in Bangladesh is growing as well as the other banks export is growing year by year. 5. from where we can see that up to 2008 its position was increasing but in 2009 Dhaka Bank’s export business is so depressing.29 then it starts falling up to May and reaches at 270. In the graph it is clearly seen that the blue shaded area shown the contribution of Dhaka Bank. It is the international department and it deals mostly with foreign affairs. In January it starts with low amount of import bill collection later in February it reaches at peak with amount of 3189. February and April and the highest achievements are in May and June which are almost doubled of its budgeted amount. And for this reason its compounded annual growth rate is diminished into 3. The problems are as follows. the overall import achievement was good in January to June except April.42%.42%.57%. In this case Dhaka Bank’s contribution is very poor comparing to its competitors. Again Prime Bank is the leader in export business. Then there is again a rise in June by 7. In 2009 Dhaka bank’s contribution was 3. But other banks contribution is more than Dhaka bank in last five years.95% and in 2005 1. Mainly because of Globally demands of Bangladeshi goods are increasing. the collections of import bills are both in downward and upward trend.From the above graph and the table we can see the contribution of each of the five banks in total export in Bangladesh. I have discovered some problems regarding the analysis of foreign trade business and activities of Dhaka Bank Ltd.26%.
• Marketing Policy of the Bank is not strong enough to attract Potential Customers. In the month of March the highest outward remittance was happened and the amount was Tk. In DBL Foreign Exchange Branch the inward remittance was highest in the month of January and it decreases in the following months. Lack of promotional initiatives to expand the Foreign Exchange business specially the import L/C services.• • • • In DBL Foreign Exchange Branch export bills amount are increasing except a slight fall from March to April and remains flat in May and June. in June it decreased by 89.03. proper rewards. Unattractive packages and high charge in foreign transaction than other competitors. import and on other foreign trade activities occurred due to Change in policies. timely promotion and motivation among the employees. Budget declarations. due to change in the foreign trade policy as well as monetary and fiscal long term financing suffer a lot. • • • Exchange rate movements. Lack of proper training about the installed software and the newly introduced Central processing center (CPC). • • • Lack of employee performance appraisal. Some further simplification and modification of this software might actually help the bankers to work more efficiently in providing international trade services. Effect of economic downturn is slowly taken place in Bangladesh. 85 | P a g e . The employees are still struggling to conduct foreign exchange services through the new software and system because of its complexity. expectation of the importers affect the growth. Ups and downs were made in export.6%. Lac 541. Government rules and regulations often make problem for import and export market in Bangladesh.
86 | P a g e Chapter I 6 Conclusions & Recommenda tion .
hoot rolled non alloy steel.70 million compared to the volume of 2008 for Tk.) and footwear etc. 87 | P a g e . as before. fertilizers and edible ell/oil seeds. This bank constantly looks for ways and means to improve productivity world class services in a cost effective manner.68 million in 2009 showing a decrease of 4. Contribution in total import and export of DBL is quite shorter among the other banks. HDPE. It is showing remarkable progress of its financial position with the mission of being countries leading bank providing world class services in a cost effective manner. As of 31st December 2009 their import volume was Tk. 87. interlinings. Dhaka Bank Ltd.75 million from Tk.37 million showing a decrease of 12.28%. The other export items were jute. labels etc. 91. They have already celebrated their fifteen birthday and thus have passed a long way in their banking life. The volume of export business decrease to Tk.89. This bank constantly looks for ways and means to improve productivity by rendering to its customers in order to remain competitive in the market. 102. accessories (buttons. fabrics and accessories. The major import items of the year were.37% from the last year. was active in extending services to their valued clients related with import business.6. In the year 2009. DBL Foreign exchange Branch experienced a negative growth of export business in 2009 from 2008.1 Conclusions Dhaka Bank Limited has started their journey as a full-fledged commercial bank in 1995. raw cotton. Capital machinery scrap vessels. readymade garments still remained the major export item of 2009.
the base of business would become weaker. the branch can think about being diversified its import portfolio. With such acumen and execution DBL is hopeful to continue the successful trend of remittance and foreign trade operations in upcoming years. DBL has the reputation of being the provider of good quality services to its potential customers. import has decreased by 64. To widen the range of foreign exchange business and to reduce the risk. 88 | P a g e . As L/C amount is in ups and downs trend so the branch need to take steps to find out the specific reason to make it up warding or to make it stable at least. DBL has a bulk of qualified. Need to extend Branch Network and more New Branch to be opened in other Cities and Towns of Bangladesh to reach out the Potential Customers. experienced and dedicated human resources. however it increases client bargaining power over the bank and there is always a risk that if a major client leaves the branch. 6.Besides the above activities DBL is showing its interest in foreign operation. The Foreign Exchange Department is dealing with a narrowed group of clients. It works with the western union money transfer network along with its own 13 exchange house network. It is good to have trustworthy clients even if their number is limited.67% (in May). To run the business efficiently they should focus on endorsement.2 Recommendations In the last six months of 2010. The branch should focus on inward remittance because it is downward in nature and decreased by -98. because they only endorse for the corporate clients. Proper training needed for ensuring efficient performance of the employees. so they should take proper steps in this sector to increase the import business. DBL has enhanced its reach to the NRBs for safer transfer of money.76% in the month of April.
Letter of Credit opening procedure and Margin requirement may be relaxed for prime customers. the Bank can take some steps for Personal Selling. ATM Cards. The kind of exposure the other private banks have around the whole city is missing in DBL’s promotional activity. Dhaka Bank Limited (DBL) should think about it and if possible then maintain the Interest Rate and Bank Charges as similar as to its Competitors. Periodical performance appraisal and giving recognition and rewards to the qualified employees to keep motivating them. otherwise new and competitive banks will take the clients away by giving special facilities. Dhaka Bank Limited (DBL) needs to advertise through various Media about Credit Cards. The promotional activity the bank is engaged in seems not enough. Staffs/Officers can be hired or Internees can be used for this purpose. For Cash Withdrawals and Deposits more ATM can be installed in major cities and towns across the Country through which Customers can easily get access to their Accounts. The Brochures of the Products and Services of the Bank can be mailed or Circulated by the Internees to the Potential Customers and Internees can give brief Idea to the Customers about the Products and Services of Dhaka Bank Limited (DBL). Dhaka Bank Limited (DBL) should practice a Participant Marginal Process because in this all the Employees get chance for Participating in Problem Recognition and Problem Solving and this will make the Employees feel better which will work as a Motivation Weapon. No extra cost will be incurred in this. Apart from Advertising in Media. The Brochures of the Products and Services of the Bank can be mailed with the welcome letters along with the Statements of the Customers via courier. 89 | P a g e . DBL should strengthen its promotional activity immediately. Also Award System should be activated depending on the Performance Appraisal of the Employees. To attract customers and to be visible among the competitors. Tele Banking and its other Products and Services. As the Competitors offering a Higher Interest Rate on Deposits and Lower Charges in Loans.
90 | P a g e Chapter I 6 References .
(2009) “Foreign Exchange: A practical guide to the FX markets. 2006. 2007. 1999.aspx www.bd/Home.nbr-bd.gov. 2009 • • • Websites: • • • • http://www.35 & 89 Peter S.References_________________________________________________ Books & Reports: • • Timothy Martin Weithers.com/4238/retention_rate. 2008. P-18.bbs. Irwin/McGraw-Hill. 2007. Ltd. Person Education (Singapore) Pte.dhakabankltd. Baillie McMahon. Commercial Bank Management. DBL: Annual Report 2005. 2006.html http://www. (2007).com/ 91 | P a g e .org http://www.” P-17-24. 2008.. 4th Edition.investorwords. “The Foreign Exchange Market:. Rose. Inc. 10th edition. 2009 DBL Business Solution 2005.
com/finance • • 92 | P a g e .foreign-trade.com/search Wikipediea.org/wiki/letter_of_credit http://www.yahoo.• http://www.
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